Consumer warning over online mortgage sites

Using an online digital platform to source a mortgage or loan may hinder your chances of receiving the most suitable loan available, according to the national peak body representing finance brokers.

Peter White from the Finance Brokers Association of Australia believes while online broking will form a significant part of the industry’s future, in these early days customers should remain cautious and vigilant when applying for a loan online.

“It is exciting to see the broking channel evolve in this digital age but potential customers must be aware of the current deficiencies of these websites,” he said, explaining that many sites do not make it clear to the borrower precisely who they are and what they stand for.

“People must be careful and find out if the site they are on is operated by a lender and whether the products being offered are limited.

“Many online sites I have visited exist purely to gather leads as a generation tool and distribute that information to other parties.”

He said there are also platforms which work solely on algorithms and generate the cheapest loan for the borrower when, “cheaper is not necessarily better and most suitable for the customer”.

Mr White, a 37 year industry veteran, believes making arguably your most important financial decision still requires a personal face-to-face relationship with a broker.

“Sitting in front of a computer screen has limitations and you can input data any way you like, but in the end you are probably not going to get a tailored outcome and it could prove very costly.

“Online platforms have their advantages, and they are definitely evolving, but at this stage they lack the dynamic interplay which is a hallmark of the relationship between brokers and customers.”